Wage Garnishments

Wage Garnishment on Tax Debts

Wage garnishments on tax debts occurs when money is deducted from an employee's earnings for unpaid taxes. The garnishment normally continues until the tax debt is fully paid off or other arrangements are made with the IRS to pay the tax due.

An employer often receives notice from the IRS to garnish - deduct - a specified amount from employee wages to satisfy a tax debt.

A federal tax debt garnishment takes priority over a local tax garnishment.

Wage garnishments are allowed in all USA states for tax debts owing to the IRS.

Garnishment Limits

The amount that can be garnished from wages for income tax debts are the lower of:

25% of disposable income; income after standard tax deductions

any wage income in excess of 30 times the federal minimum wage

However some states exercise garnishment thresholds lower than the above federal levels.

Steps The IRS Takes Before Issuing Wage Garnishments

The IRS does not need a court order to commence wage garnishments for tax debts.

To issue a wage garnishment the IRS will need to fulfil the following steps:

The IRS must have carried out a tax assessment and issued a written Notice and Demand for Payment for taxes owed

The taxpayer must have not paid the tax owing within a specified time shown in the notice

The IRS will issue a Final Notice of Intent to Levy and notice of your right to a hearing at least 30 days prior to the garnishment or levy.

Wages can be garnished following these three steps even if the taxpayer does not receive the final demand notice.